Table of Contents
Multinational corporations are some of the most complex and extensive organisations in the world. Giants like Apple, Amazon, Microsoft and Coca-Cola operate across the globe, with each region or continent usually representing its own subsidiary in the corporate system. Managing such an operation is incredibly complicated and tens of thousands of employees are employed to play their part. Delegation is a key element in managing such a significant system, but what are some of the general challenges of operating a multinational corporation for executives?
Perhaps the most complicated part of running a multinational corporation is managing the vast array of operations around the globe. Time zones can make business communication between regions very difficult, slowing communications and decision making within corporate systems. Executives commonly use private jets to speed up communication where possible. Language barriers can also impact the process, but targeted recruitment in senior regional positions can help to overcome this challenge.
Another challenge faced by multinational corporations is getting to grips with different markets across continents. Cultural and political environments can change massively from one region to another, meaning that business operations, marketing plans and financial service considerations will dictate how a subsidiary or business operates in that country. Customer satisfaction and needs can also change dramatically, so specific market research and local knowledge are essential for a product or service to thrive in a certain region.
Foreign Regulatory Controls
Following on from the challenges of different markets, the regulatory systems can also be a significant hurdle for multinational corporations. Product specifications may need changing and more testing may be required in one region to comply with certain regulations. Council Tax laws and regulations are also other elements to contend with. Again, local or legal experts are a fundamental part of corporate systems to provide insight into such matters.
Labour Market Challenges
For a multinational to succeed, it must employ locals in each of its regions. However, labour markets and employment laws can represent a significant challenge. Some countries such as the USA include employee benefits like healthcare in their employment packages, whereas countries like the UK typically just provide a remuneration package. Other regions may have a completely different pay scale and average wage or salary too. This makes it difficult to standardise employment across a corporation and can have an impact on company culture. Attracting educated or qualified employees can also be difficult in some countries more than in others.
Running a multinational corporation is a complex and relentless task, but the responsibility falls on many shoulders. Those in charge must be experienced enough to take responsibility for the challenges or be competent enough to delegate to the right people.